Agency creation authority

Question 1

A principal instructs his agent in writing to "market the flat and find me a buyer", saying nothing further. The agent places advertisements, arranges viewings, and answers questions about the tenure and the maintenance charges. Separately, the principal introduces the agent to a prospective buyer at a coffee shop as "my agent, he handles everything for me".

Consider the following statements.

1. (i) Placing advertisements and arranging viewings fall within what the instruction implies.
2. (ii) The agent has no authority to do anything not expressly listed in the instruction.
3. (iii) The introduction at the coffee shop clothes the agent with authority in the buyer's eyes.
4. (iv) Acts within the agent's authority bind the principal as though he had done them himself.

1. A. (i), (ii) and (iv) only
2. B. (ii), (iii) and (iv) only
3. C. (i), (iii) and (iv) only
4. D. (i), (ii), (iii) and (iv)

Question 2

A couple who have discovered that their salesperson made a secret profit at their expense are deciding whom to sue. The salesperson is attached to a large agency which received the commission on the transaction, which provided him with his office, his training and his marketing materials, and which requires each of its salespersons to sign an indemnity in the firm's favour on joining. The agency, through its solicitors, argues that its salespersons are independent contractors rather than employees, that it knew nothing of what he did and would never have sanctioned it, and that it is therefore not answerable for any of it.

Which statement is correct?

1. A. The couple must sue the salesperson alone, the agency having done nothing itself.
2. B. The couple may sue neither of them, the salesperson being an independent contractor.
3. C. The couple must sue the buyer, who received the benefit of the underpriced sale.
4. D. The couple may sue the agency, which may recover from him under the indemnity.